Talking tech since 2003

Get ready for an Internet revolt: today in a letter to shareholders, Netflix CEO Reed Hastings revealed that the company will be raising prices on its subscription plans—by a whole dollar.

According to the letter, Netflix tested the price-hike waters by increasing the rates for Ireland’s subscribers from €6.99 to €7.99, which resulted in “limited impact.” As such, the company will be instituting a “one or two dollar increase, depending on the country, later this quarter for new members only.” So if you’ve been putting off a Netflix subscription for some reason, you might want to jump on now to be grandfathered in…for “a generous time period,” at least. The letter says that current subscribers will also see the price hike, but later on. Whenever “generous” is up, I guess.

So what’s the reason for the increase? The letter says that the extra cash will allow Netflix “to acquire more content and deliver an even better streaming experience.” To that I say: good. Yes. Please do this.

Before you go crazy, let’s ponder for a second. A one dollar increase—even a two dollar increase, is pretty minimal considering the incredible service Netflix provides. You have access to tons of content 24 hours a day, seven days a week, often at high definition resolution. The company has actually done a pretty good job of getting top tier content from TV and movies onto its service in a timely fashion, and has single-handedly transformed the way we consume content. It’s original programing rivals the stuff you can find on premium networks like HBO, and it costs only eight bucks.

If the price went up to ten, it’d still be a bargain. And the good news is that a one or two dollar increase is a pretty easy pill to swallow, all told. If this hike can get more good shows on Netflix, and more great movies that will keep me from having to visit a Redbox kiosk, then I’m all for it.

[Netflix Shareholder Letter]


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